Artemis' Foster: Mervyn King 'losing the plot'

Artemis' fixed income star James Foster says the governor of the Bank of England needs to raise rates now to prevent inflation becoming embedded in the system.

Foster, who runs the £516m Artemis Strategic Bond fund, says the MPC needs to act now by raising rates before people begin to clamour for higher wages, leading to an inflationary spiral. He says: "Mervyn King is starting to lose the plot. He is not being as aggressive as he should be on interest rates. "He needs to get them back up again or inflation will become embedded in the system and will be much harder to get rid of." Foster, whose fund has outperformed the IMA Strategic Bond sector over the last three years, returning 28.9% versus the average return of 19.5%, says raising ra...